The South Australian Government plans to introduce a road user charge for electric vehicles in a national first.
- The SA Government plans to introduce an electric vehicle road user charge
- It estimates it will raise about $1 million per year
- The Government is also spending $18 million on charging stations
The state’s Treasurer, Rob Lucas, said two other Australian jurisdictions are interested in following his Government’s lead within 12 months.
As part of his State Budget yesterday, Mr Lucas announced the South Australian Government planned to charge electric vehicle drivers for using the road, just as other motorists pay the fuel excise duty.
He argued that as electric vehicles replace petrol and diesel vehicles over time, causing fuel excise revenue to “disappear”, a “road user charge” on non-petrol vehicles was needed to replace it.
It would raise about $1 million per year, starting in July 2021, Mr Lucas said in his budget speech.
The charge would include a fixed component and a variable charge based on distance travelled.
“I’m pretty confident that over the next 12 months, at least one or two other jurisdictions will announce similar road user charges.”
He said the SA Government was “working actively with one particular jurisdiction”, which he declined to name, in order to agree “on how it would be implemented and the definitions”.
Introducing the charge would depend on legislation passing Parliament next year, he said.
‘Good time’ to start
Royal Automobile Association senior manager for safety and infrastructure Charles Mountain said now was “probably a good time to look at introducing this scheme” while there were only few electric vehicles on the road.
“Ideally, we would like to see — as would the Australian Automobile Association — this being done in a national approach to introduce any kind of road user pricing for electric and plug-in hybrid vehicles, but the State Government to its credit is looking at this,” he said.
Infrastructure Partnerships Australia chief executive Adrian Dwyer congratulated the Government for its decision.
He named New South Wales and Victoria as other states looking to “take action on this generational reform opportunity”.
“A small cadre of blinkered enthusiasts will argue against a fair approach, but this move shows sensible reform is possible when smart governments act early and decisively,” Mr Dwyer said.
“The South Australian Government’s bold move provides a clear pathway for broader state-led reform of our road funding system to now be actively pursued in all jurisdictions.”
Discouraging for buyers
Electric Vehicle Council chief executive Behyad Jafari said he believes South Australia would become the first market in the world to put a tax on electric vehicles using roads.
He said some other places were looking at a similar scheme, but only because they had already encouraged so many people to take up electric vehicles through subsidies and tax incentives.
He said fuel excise did not directly pay for roads as it was, and electric car owners could currently pay more in tax than other car owners, as taxes when they bought their vehicle were higher because they were generally more expensive than other cars.
He said Mr Lucas’s proposed charge could discourage more uptake of electric vehicles.
“Two thousand-odd people are driving them in South Australia right now,” Mr Jafari said.
He said governments should look at “a distance-based charge, an emission charge and a congestion charge, because that’s where most of the costs actually lie”.
“But that part is quite politically difficult,” he said.
“Going to the 2,000-odd electric-vehicle drivers and slugging them with the tax is a bit easier politically and that’s really the only excuse given for why they would do it now.”
Conservation Council SA chief executive Craig Wilkins also criticised the move.
“This is deeply surprising and completely at odds with the trend interstate and overseas,” he said.
“What we’re seeing in other places is a reduction in charges and taxes to try and increase the uptake of electric vehicles.”
The Australia Institute’s South Australian director, Noah Schultz-Byard, said it was “a great big new tax on not polluting”.
Funding for charging stations
The State Budget also included more than $18 million for almost 200 electric vehicle charging stations in areas such as Adelaide, Ceduna, Port Augusta, Port Lincoln, Port Pirie and Mount Gambier.
Last week, the Government announced it would transition its existing car fleet to electric vehicles by 2035.
Energy Minister Dan van Holst Pellekaan said the transition would start immediately.
Premier Steven Marshall said electric vehicles would be “the future for South Australia”.
“We don’t want to be taking a back seat; we want to make sure we can do the right thing by the environment,” Mr Marshall said.
Australian Electric Vehicle Association SA branch chair Sally Knight said the budget measure was disappointing after last week’s charging station announcement.
“Now is not the time to add another cost into the mix without taking into account the benefits to the health budget and the environmental budget that people driving EVs bring,” she said.
SA Freight Council executive officer Evan Knapp said it was inevitable that all road users would eventually be charged by how far they drove.
“I think it’s good that we’re moving to such a system for electric vehicles first so that they are paying a fair share and the rest of us will follow into a road user charge model,” he said.
Motor Trade Association chief executive Paul Unerkov said a new tax was putting out the wrong message when the State Government had not yet formulated an electric vehicle strategy.